by Peter Nelson and Josh Archambault, USA TODAY

by Peter Nelson and Josh Archambault, USA TODAY

As the key months for implementing the Affordable Care Act begin, 30 governors are resisting key provisions of the law. But these leaders don't need to act just as a phalanx of opposition; if they work with President Obama and Obama works with them, they can change the law's future for the better.

The law won't work without state and local execution of the reform. Governors need to use that fact to exact a price, greater flexibility, for their cooperation. Obama would be wise to play ball. The more governors can tailor reforms to their state, the more they can mitigate premium spikes, doctor shortages, state budget shortfalls and other problems potentially caused by the law.

Though Obama is unlikely to change central provisions of the law, such as the individual mandate, there is hope on other fronts. States should consider several demands:

Provide flexibility. The law mandates pre-existing conditions will be covered, but this approach ignores local market conditions and will result in 30%-80% premium spikes for millions. A few states, such as Minnesota, successfully guarantee coverage through state high-risk pools. Others might prefer to use different risk-adjustment mechanisms to encourage insurers to take on sicker patients. States should be able to use or maintain what works instead of being forced to switch.

Create consumer information exchanges. Plans for state exchanges assume that a government-sponsored online market for insurance will be the only place to buy a subsidized policy. But pushing just one government exchange prevents competition to contain costs and improve the consumer experience. And private brokers and existing exchanges already sell insurance. States don't need to duplicate their work. Instead, the public exchange should focus solely on qualifying people for subsidies and providing consumer information.

Allow health accounts for all. The law mandates employers with more than 50 employees provide coverage. But tying insurance to employment is one reason people don't have insurance that moves from job to job. Small employers are put in the impossible position of choosing between large premium increases and dropping health benefits. Many want to offer employees help, but the cost is too high. In place of the mandate, we could tweak the tax code to allow companies to contribute toward personal accounts to pay for insurance and other medical expenses that allow balances to be carried forward.

Experiment in Medicaid. Many governors have balked at the option to expand Medicaid, given the potential cost to states and the low quality of care. States should be allowed to put much of the Medicaid population on premium supports similar to those offered in an exchange. Alternatively, states should be freed to administer their Medicaid programs under a welfare-like block grant, or at least copy innovations in other states with less red tape.

The health care law itself hints at state flexibility, but the regulations have squashed any hope that states can tailor reforms to their own needs. Without elasticity, the law is an entirely federal program and states should leave it alone. However, if states are willing to step forward and articulate a better way, the law might become a genuine partnership that can work for America.

Peter Nelson is director of public policy at the Center of the American Experiment. Josh Archambault is director of health care policy at the Pioneer Institute.

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